UK cuts taxes, increases spending and accelerates the fall of the pound
LONDON — The pound sterling suffered its biggest one-day drop in 2½ years after Britain’s new government presented plans to cut taxes and increase spending. This has raised concerns that increased government borrowing will worsen the country’s cost of living crisis. The British currency plunged more than 3% on Friday. Treasury chief Kwasi Kwarteng announced sweeping tax cuts which he said would spur economic growth and generate increased revenue, without introducing corresponding spending cuts. He also said previously announced plans to limit soaring energy bills for homes and businesses would be financed by borrowing. Critics attacked the plan for favoring business interests over workers and offered no figures on its impact on the government’s budget targets.
Revamped Detroit auto show now also features new flight tech
DETROIT – The Detroit Auto Show is back in full force. And a flight. The prestigious North American International Auto Show last took place in 2019. It returned last week. Visitors can once again peek at the latest offerings from some of the world’s biggest automakers. But now they can also experience what organizers call “the show above the show.” The Air Mobility Experience features exhibits and demonstrations of six air mobility innovators, including an electric vertical take-off and landing aircraft, hoverbike, hoverboard and jet suit. The show runs through Sunday at a downtown convention center.
The United States will seek to strengthen labor and environmental standards in Asia
WASHINGTON — The United States outlines goals for a new trade deal with Australia, Japan, South Korea and nine other countries meant to signal the country’s commitment to working with the Indo-Pacific region at a time when Chinese influence is increasing. The office of the U.S. Trade Representative on Friday released its negotiating objectives for the Indo-Pacific Economic Framework, an agreement with the 12 nations launched in May. Among them, the United States wants Indo-Pacific countries to improve their labor and environmental standards and ensure their markets remain open to competition, while taking steps to reduce supply chain backlogs. at border crossings.
GM spends $760 million to convert Toledo plant to make parts for electric vehicles
TOLEDO, Ohio – General Motors says it will spend $760 million to retrofit its transmission plant in Toledo, Ohio, so it can build electric vehicle drivelines. It is the first GM engine or transmission plant to begin the long transition from internal combustion engines to electric vehicles. GM aims to manufacture only electric passenger vehicles by 2035. The investment will maintain the jobs of about 1,500 hourly and salaried workers at the Toledo plant, which now makes four transmissions used in pickup trucks and many other GM internal combustion vehicles. This is good news for workers in Toledo, who are worried about the future of their factory.
Bank managers call for Trump official to be fired amid ethics probe
MIAMI — The executive directors of the Inter-American Development Bank voted unanimously to recommend firing a former Trump official as president of the Washington-based institution. The action follows an investigation which revealed that Mauricio Claver-Carone had violated ethics rules by favoring a senior collaborator with whom he had a romantic relationship. A person familiar with the vote said the decision to recommend Claver-Carone’s ouster was made in a closed meeting on Thursday. The Associated Press has obtained a confidential report from a law firm hired by the bank’s board sparked by an anonymous misconduct complaint against Claver-Carone. Investigators say it is reasonable to conclude that the relationship had existed since at least 2019, when the two held senior positions on the National Security Council.
After 90 years, German bakery closes as energy costs soar
COLOGNE, Germany — A family bakery in the German city of Cologne is shutting down its ovens for good after 90 years because it can no longer afford rising energy prices resulting from Russia’s war in Ukraine. Engelbert Schlechtrimen’s grandparents founded the bakery before the Second World War and the 58-year-old took it over 28 years ago from his father. His company is one of the casualties of a European energy crisis caused by Russian natural gas cuts. The resulting increases in energy and electricity prices have weighed on businesses already struggling with rising other costs as inflation rises.
Spain plans tax hike on millionaires to help those in need
MADRID — Spain’s Socialist-led coalition government is planning a temporarily higher tax rate for the country’s top 1% from next year. This is in addition to its windfall taxes on large energy companies and banks. Socialist Prime Minister Pedro Sánchez said on Friday the change was intended to help fund the welfare state amid difficulties caused by rising energy and food prices. The annual inflation rate jumped to 10.5% in Spain last month. The government says the tax hike only targets millionaires. He says the exact increase and scope of the tax measure is still being worked out.
Inflation and unrest challenge Bangladesh’s ‘miracle economy’
DHAKA, Bangladesh — Bangladesh’s economic miracle is under strain as fuel price hikes amplify public frustrations over rising prices for food and other basic necessities. Protests have erupted in recent weeks, adding to pressure on the government of Prime Minister Sheikh Hasina, which has requested help from the International Monetary Fund to protect the country’s finances. Experts say Bangladesh’s predicament is nowhere near as dire as that of Sri Lanka, where months-long unrest led its longtime president to flee the country. But he faces similar problems: overspending on flagship projects, public anger over corruption and cronyism, and a weakening balance of trade. These trends are undermining Bangladesh’s progress towards becoming a wealthier, middle-income country.
The S&P 500 fell 64.76 points, or 1.7%, to 3,693.23. The Dow Jones Industrial Average fell 486.27 points, or 1.6%, to 29,590.41. The Nasdaq fell 198.88 points, or 1.8%, to 10,867.93. The Russell 2000 Small Business Index fell 42.72 points, or 2.5%, to 1,679.59.